Atmos Energy 1998 Annual Report Download - page 55

as compared with 1997 due to increases in both sales volumes and
margins, due primarily to customer growth. The Company’s equi-
ty investment in WMLLC has grown from $5.8million in 1995 to
$11.9million at September 30,1998.
Leasing and Rental Operations Key financial and operating data
for the leasing and rental operations are presented in the follow-
ing table.
Year ended September 30,
1998 1997 1996
(In thousands)
Operating revenues $3,977 $4,005 $4,204
Operating expenses 3,748 2,609 2,718
Operating income 229 1,396 1,486
Other income 3,460 505 486
Interest charges 417 784 735
Net income $3,272 $1,117 $1,237
This segment leases buildings, vehicles, and other equipment
to the Company and other non-related customers.
Year ended September 30, 1998 compared with
year ended September 30, 1997
Operating revenues remained consistent due to the stable
nature of the leasing business (the leasing and rental segment
leases buildings and equipment to the United Cities Division and
other third parties).
Operating expenses increased $1.1million from $2.6million
in 1997 to $3.7million in 1998 primarily due to the tax effect of
gains on sales of real estate and equipment.
Other income increased $3.0million from $.5million in 1997
to $3.5million in 1998 primarily due to gains on the sale of real
estate and equipment.
Interest expense decreased $.4million from $.8million in 1997
to $.4million in 1998 due to decreased debt, which was retired
using the proceeds from the sales of real estate and equipment.
Year ended September 30, 1997 compared with
year ended September 30, 1996
Operating revenues, operating expenses, other income, and
interest charges remained relatively consistent between 1997 and
1996 due to the stable nature of the business. No buildings or
equipment were purchased or sold during 1997.
Capital Resources and Liquidity
(SEE “CONSOLIDATED STATEMENTS OF CASH FLOWS”)
Because of the pooling of interests of Atmos, which has a
September 30 fiscal year end, with UCGC, which had a December
31 year end, as required by generally accepted accounting princi-
ples, the activities of UCGC for the quarter ended December 31,
1996 are included in the restated 1996 consolidated statement of
cash flows instead of the 1997 consolidated statement of cash flows.
As a result, amounts in the 1997 consolidated statement of cash
flows as reported are different than they would have been, had
they included a full 12 month’s activity for UCGC.
The following pro forma condensed consolidated statement of
cash flows reflects activities of both Atmos and UCGC for the full
12 months ended September 30,1997.
(In thousands)
Cash flows from operating activities:
Net income $ 23,838
Depreciation 47,494
Other (11,054)
Net cash provided by operating activities 60,278
Net cash used in investing activities (131,286)
Cash flows from financing activities:
Increase in notes payable, net 63,600
Issuance of long-term debt 40,000
Repayment of long-term debt (16,037)
Issuance of common stock 10,482
Cash dividends paid (29,778)
Net cash provided by financing activities 68,267
Decrease in cash (2,741)
Cash at beginning of year 8,757
Cash at end of year $ 6,016
Cash Flows From Operating Activities Cash flows from operating
activities as reported in the consolidated statement of cash flows
totaled $91.7million for 1998 compared with $68.7million for
1997 and $91.7million for 1996. The decline in net cash provided
by operating activities from 1996 to 1997 was primarily the result
of only including nine months of UCGC activity in the 1997 state-
ment of cash flows. Likewise, the increase in net cash provided
from 1997 to 1998 was the result of the full 12 months activity for
1998 for the combined companies. Using 1997 beginning balances
for UCGC as of December 31,1996 resulted in large swings in cer-
tain seasonal asset and liability accounts like accounts receivable
and accounts payable. Gas in storage increased in 1996 because of
higher gas cost, but was lower in 1997 and 1998 because of sub-
stantially lower gas prices during the summers of 1997 and 1998
51
ATMOS ENERGY CORPORATION